Anti-Gorge Hotel protesters fear the 39-metre, nine-storey proposal on Paterson Street will be a repeat of the "unfortunate" Myer and Telstra buildings, which tower above the CBD heritage precinct.
Almost 100 people marched with placards and banners from Home Point to Kings Park on Sunday before a series of speeches reiterated groups' concerns about the $50 million hotel.
The matter is set to appear before the Resource Management and Planning Appeal Tribunal on September 2 after neighbouring restaurant owner Susie Cai appealed the City of Launceston's approval.
Ms Cai spoke at the protest and said the council's processes had been poor, including failing to notify her of the development application, forgetting meetings with her and failing to upload all relevant documents.
"It felt like they'd decided already," she said.
Ms Cai said she still had not received any contact from JAC Group, the hotel's developer, to address her concerns about overshadowing and seismic issues from construction.
Heritage Protection Society of Tasmania president Lionel Morrell spoke of Launceston's other tall buildings, largely built in times before modern planning schemes.
Watch all the speeches from the protest:
He said the council had shown "restraint" over tall buildings since 1977, and the Gorge Hotel's maximum height should only be 12 metres.
"We do have some tall buildings in Launceston. They're all unfortunate, none of them were planned, none of them were developed within the modern planning scheme system," Mr Morrell said.
"The Telstra building in St John Street was only half that height when first constructed.
"The Myer building was built in 1959. Every overseas or interstate visitor, every outsider that comes along, looks in amazement and says 'how did you allow that to happen?'"
Protesters also claimed there were unanswered questions about alleged plans for a cable leading from the Gorge Hotel to Cataract Gorge, where it could meet up with proposed gondolas.
Speaker Jo Saunders said she was "absolutely horrified" at that suggestion, and visitors to Launceston come to enjoy the region's natural beauty rather than "huge hotels and shiny buildings".
JAC Group: Public supports Gorge Hotel
JAC Group claimed the "vast majority" of Launceston residents supported the Gorge Hotel proposal, based on polling the developer commissioned by EMRS.
City of Launceston councillors also voted 10 to 1 to approve the development, finding it conformed with the relevant planning schemes.
JAC Group managing director Dean Cocker said the protest was not indicative of broader support for the hotel.
"EMRS also conducted a statistically valid random sample poll of 800 residents, which showed the proposal had 72 per cent support among Launceston residents," he said.
"Even the restaurant owner will have less overshadowing at all times of the year than a 12-metre high wall on her boundary, which is permitted under the planning scheme in the Urban Mixed Use Zone.
"There is a small noisy minority in the community that do not want this project to proceed, but the vast majority, almost three in four, support the project and it meets all of the planning scheme requirements."
Mr Cocker said "there is no gondola in the Gorge Hotel proposal".